National Gallery Dispute with Artists Has Copyright Fees Hanging in the Balance

National Gallery Dispute with Artists Has Copyright Fees Hanging in the Balance

The Supreme Court has granted leave to appeal the Federal Court of Appeal’s decision in Canadian Artists’ Representation/Front des artistes canadianes (CARFAC/RAAV) et al  v National Gallery of Canada.

This case arose from stalled negotiations regarding minimum copyright fees between the National Gallery and CARFAC/RAAV. Although the parties had initially negotiated the issue, the National Gallery refused to continue copyright negotiations in 2007 after receiving a legal opinion, which determined that CARFAC/RAAV did not have the right to negotiate copyright fees. Once negotiations reached a standstill, CARFAC/RAAV brought a claim before the now defunct Canadian Artists and Producers Professional Relations Tribunal.

The argument from the National Gallery rests on s.3 of The Copyright Act, which provides that only the holder of copyright or a person authorized in writing by the holder can authorize others to negotiate rights reserved to the copyright holder. Since the organization did not have this authorization, the Gallery reasoned that CARAC/RAAV could not compel them to negotiate on copyright. Moroever, The Status of the Artist Act, which allows for organizations such as CARFAC/RAAV to get certification to collectively bargain on behalf of Artists did not supersede the conflicting provisions of The Copyright Act.

CARFAC/RAAV does not rely on copyright law to make its argument. CARFAC/RAAV argues that bad faith rests in the fact that the National Gallery abruptly ended negotiation of the fees after four years of negotiation on the issue.  Nevertheless, they submit that the right to negotiate a scale agreement does not usurp the artists’ sole right to negotiate on their own behalf. CARFAC/RAAV argues that their negotiations will merely provide the minimum for artists who can then bargain individually with firms for fees higher than this basic amount. In fact, their negotiations stipulated that all rights were to remain with the artists.

In my opinion, this appeal will depend on how the Supreme Court decides to frame the central issue of the dispute. The minority opinion from the Federal Court of Appeal decision and the Canadian Artists and Producers Professional Relations Tribunal based their reasoning on foundations of labour law, relying on Royal Oak Mines Inc v Canada (Labour Relations Board). This decision held that a labour board can find a party has not made a reasonable effort to enter into a collective agreement if a party refuses to even discuss a standard term that is acceptable in collective agreements in comparable industries.  While unlikely, the Supreme Court could bypass the copyright issue entirely if it agrees with this approach to resolving the dispute.

It is, however, more likely that the Court will determine the case on the basis of the copyright issue. In order to do so, the Supreme Court will have to determine whether the provisions in The Status of the Artist Act and the definition of a “service” conflict with provisions provided in The Copyright Act. According to the majority in the Federal Court of Appeal, a commissioned work involves a service, in that the patron commissions the actual work that the artist puts into their creation. On the other hand, once the work is completed there is not “service” so to speak. CARFAC/RAAV argues that the “service” was the artist granting others the right to use the work.

If the court accepts that the "service" is the granting of a right to use, CARFAC/RAAV's further argument runs into issues in that the group does not negotiate rights that belong solely to the artist. If the organization negotiates the right to use the work and the fees for said use, this would appear to be a negotiation relating to issues within the sole purview of the copyright holder (under s.3 of The Copyright Act). If the Gallery is correct in their assertion that these negotiations were outside the scope of CARFAC/RAAV’s authority then the court is likely to support their position that there cannot be a finding of bad faith from the breakdown in negotiations.

One can’t help but wonder if the parties would have fared better if they had continued negotiations. At this point, the parties have been involved with this situation for over a decade. CARFAC/RAAV has had to rely on Pro Bono counsel and fundraising to bring their claim to the Supreme Court. A ruling in their favour could be expensive for the National Gallery and such a precedent could affect galleries across the country. At this point, the best result that the National Gallery Foundation CEO can hope for is for the Court to provide clarity and put this dispute to rest. Still, no matter how the Court rules, the National Gallery will have to make an attempt to negotiate with artists - whether individually or through CARFAC/RAAV.

Allison McLean is an IPilogue editor and a JD Candidate at Osgoode Hall Law School.